ICICI Bank on Monday said that its mortgage loan portfolio had crossed 2 lakh crore, and it has a remarkable collection in home loan disbursements in October. Anup Bagchi, Executive Director of the bank, said that the demand for home buying is returning.
Affordability of homes and the bank going digital has helped in accelerating growth. The collection in terms of the number of customers and value is considerably higher than in September. The bank is working towards improving its digital channels. It has made the entire mortgage process digital along with instant loans. The bank is also trying to give 5-10% more sanction amount compared to other banks. Unlike personal loans, home loans require the buyer to have collateral.
Since corporate loans have become risky, banks are shifting towards increasing retail loan portfolio. Bagchi said that the share of securitization in the overall mortgage portfolio had reduced significantly. However, Bagchi declined to give any target for the home loan portfolio; he added that the bank would try to be competitive. In the second quarter, the retail book of ICICI Bank had grown 13% year-on-year and 6% on a sequential basis. The growth in the domestic corporate loan portfolio stood at 7%. In the quarter, of the total loan portfolio, 65.8% was retail loans. Including non-fund outstanding, the retail loan was 53.6% of the entire loan portfolio.
Despite COVID-19 and economic slowdown, mortgage disbursements of ICICI Bank surpassed pre-Covid levels. The bank now sources one-third of its new home loans digitally and has plans to expand it up to three-fourth within three years. The bank is leveraging on Big Data Analytics to offer new loans, top-ups, and balance transfer instantly to pre-approved customers. The bank also launched a video KYC facility for its customers during the pandemic.
Anup Bagchi said that the bank is expecting high demand from upcoming cities for real estate, especially in the affordable segment; the bank broadened its operation and now has its presence in 1,100 locations in the country, including tier 2, 3, and 4 cities. For efficient processing and quick turn-around for customers, the bank had expanded its credit processing centers to over 200 in the past two years. The bank’s expansion plans, digitization, and prompt actions taken during the pandemic have aided in crossing the 2 lakh crore property loan milestone as a private lender.
